It’s a great opportunity for all the other nationalities to set up a business in the UAE. To encourage the company formation and follow facilitating legislative setting, the President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued commercial companies ownership rules on November 23, 2020.
Certain guidelines have been issued by the UAE economy to be followed by foreign investors who require full ownership. This was begun from June 2021 by the Federal Decree-Law No. (26) of 2020. It has shown some changes from the Federal Law of 2015. There is no change in the licensing in the new procedures of full ownership.
During the early days, acquiring 100% ownership by a foreign investor was not possible in Dubai. But the new law has come into existence where investors get 100% ownership.
Do not worry if you have an existing company that follows old laws! You can also comply with the new law and can complete the ownership program. The new law will be helpful especially for foreign investors.
What are the amendments in the Old law?
The old Commercial Companies Law, Law No. 2 of 2015 says that the foreign investors have the ownership of only 49% in Limited Liability Company (LLC) and the rest 51% ownership is held by the local sponsors. Also, many companies demand to follow certain criteria to continue operational processes.
The new law states that if you have proper documents to submit, it is possible to establish a new business in the UAE. if the company is owned by local bodies or by the federal government, then those companies are not eligible for this. Since the foreign investors were not getting the proper ownership in the Dubai mainland, the government put forth this new rule to encourage them. The 100% ownership will be beneficial to the commercial agencies, banking sectors and foreign ownership.
The new law helps to establish “Dubai next” which means Dubai will eventually see huge improvements thereby making the place a good investment choice.Let’s check what are the benefits you get from 100% foreign owners.
Benefits of 100% Foreign Ownership
100% UAE ownership of companies for foreign investors is one of the most important decisions of cabinet resolution.
It businesses the important parts of the ownership cabinet resolution. Not all businesses and shareholders are eligible for 100% ownership. There are some criteria and flexibility to be met to acquire complete ownership of the UAE.
You enjoy benefits like the flexible blue environment in setting up a business in Dubai mainland.
- Enhancing the country’s economic status.
- Easiness in conducting businesses.
- Brings in movements from investors abroad
- Advanced competition among the businesses leads to development in the nation.
As mentioned earlier, foreign investors must meet some criteria to get 100% ownership. Business formation is quite challenging when you don’t approach any professional business set-up agencies. Each zone has different criteria to be met and depending on your choice of the area differ. The revision of existing law is quite beneficial to both the foreign investors as well as the UAE government.
Since the share for foreign investors in a company in Dubai was limited to 49%, the economy was gradually affected in the nation because the investors abroad did not bring much of their shares. This led to the amendment of the law of 100% ownership he foreign investors in the UAE.
With the new law, the entrepreneurs are influenced in different ways like:
- Convenient business functioning
- Brings the competitive spirit in new entrepreneurs
- Profits double fold with more investments by the foreign investors
- No need to worry about taxes
- Acquire visa for 10 years
The expert team at AVA helps your firm to arrange all the documents required for a business formation that is based on the new guidelines. Be in touch with us for hassle-free business setup procedures for your new company.